In a typical leveraged buyout, there are three components. The acquirers borrow a significant portion of a publicly traded firm's value (leverage), take a key role in the management of the firm (control) and often take it off public markets (going private). None of these three components is new...

If there has been a shift in corporate finance and valuation in recent years, it has been towards giving excess returns a more central role in determining the value of a business. While early valuation models emphasized the relationship between growth and value - higher growth firms were...

Risk can be both a threat to a firm's financial health and an opportunity to get ahead of the competition. Most analysts, when they refer to risk management, focus on the threat posed by risk and emphasize protecting against that threat (i.e. risk hedging). In keeping with this narrow definition...

The growth of financial markets in Asia and Latin America and the allure of globalization have made the analysis and assessment of country risk a critical component of valuation in recent years. In this paper, we consider two issues. The first is the whether country risk should be considered...

Traditional valuation techniques - both DCF and relative - short change the effects of financial distress on value. In most valuations, we ignore distress entirely and make implicit assumptions that are often unrealistic about the consequences of a firm being unable to meet its financial...

It is clear that some firms are more forthcoming about their financial affairs than other firms, and that the financial statements of a few firms are designed to obscure rather than reveal information. While differences in accounting standards across countries was viewed as the primary culprit...

In the last decade, firms have increasingly turned to offering employees options and restricted stock (often with restrictions on trading) as part of compensation packages. Some of this trend can be attributed to the entry of young, cash poor technology firms into the market, many of which have...

Many acquisitions and some large strategic investments are often justified with the argument that they will create synergy. In this paper, we consider the various sources of synergy and categorize them into operating and financial synergies. We then examine how best to value synergy in any...

Most businesses hold cash, often in the form of low-risk or riskless investments that can be converted into cash at short notice. The motivations for holding cash vary across firms. Some hold cash to meet operating needs whereas others keep cash on hand to weather financial crises or take...

Should investors be willing to pay higher prices for more liquid assets than for otherwise similar assets that are less liquid? If the answer is yes, how much should the premium be for liquid assets? Conversely, how do we estimate the discount for illiquid assets? In this paper, we argue that it...